My last one and current one both love being outside......however if I am inside that is where he wants to be. I am willing to bet the same goes for yours too. GSD's are attached to their owners and want to be with them.
That said, my last one got along awesome with my Springer Spaniel, they would play for hours with the Spaniel playing the aggressor and the Shepherd the much more powerful but benevolent play buddy. However, the Shepherd was trained to stay on our property and never left until we got the Spaniel, who was a runner on a couple rare occasions. Then the Shepherd would follow him.
My current dog met my buddies 8 month old Irish Setter puppy yesterday and they got along great too. Puppy initiates play, they spar for awhile, then Shepherd smooshes him on the ground with one paw, then they start the cycle over again, finally puppy tries to dominate Shepherd so he frigging dry humped him which really got puppy mad. So puppy starts really getting worked up and trying to bite for real........which has no effect and Shepherd finally gives a warning bark. We seperated them, made them lie down, they sniffed each other for awhile. After a couple rounds of this, they settled down and got along fine.